Correlation Between Sungchang Autotech and Microfriend
Can any of the company-specific risk be diversified away by investing in both Sungchang Autotech and Microfriend at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sungchang Autotech and Microfriend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungchang Autotech Co and Microfriend, you can compare the effects of market volatilities on Sungchang Autotech and Microfriend and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sungchang Autotech with a short position of Microfriend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungchang Autotech and Microfriend.
Diversification Opportunities for Sungchang Autotech and Microfriend
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sungchang and Microfriend is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Sungchang Autotech Co and Microfriend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microfriend and Sungchang Autotech is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sungchang Autotech Co are associated (or correlated) with Microfriend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microfriend has no effect on the direction of Sungchang Autotech i.e., Sungchang Autotech and Microfriend go up and down completely randomly.
Pair Corralation between Sungchang Autotech and Microfriend
Assuming the 90 days trading horizon Sungchang Autotech is expected to generate 1.94 times less return on investment than Microfriend. But when comparing it to its historical volatility, Sungchang Autotech Co is 2.6 times less risky than Microfriend. It trades about 0.08 of its potential returns per unit of risk. Microfriend is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 299,000 in Microfriend on October 15, 2024 and sell it today you would earn a total of 7,000 from holding Microfriend or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungchang Autotech Co vs. Microfriend
Performance |
| Timeline |
| Sungchang Autotech |
| Microfriend |
Sungchang Autotech and Microfriend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungchang Autotech and Microfriend
The main advantage of trading using opposite Sungchang Autotech and Microfriend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungchang Autotech position performs unexpectedly, Microfriend can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Microfriend will offset losses from the drop in Microfriend's long position.| Sungchang Autotech vs. Wireless Power Amplifier | Sungchang Autotech vs. NewFlex Technology Co | Sungchang Autotech vs. Woori Technology | Sungchang Autotech vs. Bosung Power Technology |
| Microfriend vs. Nh Investment And | Microfriend vs. Sungchang Autotech Co | Microfriend vs. Yura Tech Co | Microfriend vs. Eagle Veterinary Technology |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
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